Landlocked Property Explained
Landlocked property is defined as property that has no legal access to public roads. Such property is either surrounded by other privately and/or publicly owned property or completely surrounded by water. The lack of direct access to public roadways can result in the diminished use and enjoyment of the property as well as its value . As a practical matter, one who holds title to landlocked land may experience the most difficulty in the development and use of the land, as opposed, for example, to property with dedicated road frontage and free and clear access to such roads.
Legal Regulations in Selling Landlocked Property
When dealing with vacant, landlocked properties, there are some key legal considerations you need to weigh before you move forward with your venture. Can I sell landlocked property? Can I give the buyer access? Are there laws specific to my state that could guide how and when I sell the property?
Easement Law
An easement, a non-possessory right to use another’s land, is a frequent solution to problems with property access. The term easement applies to both the description of the rights granted by the easement itself and the recorded document based on those rights. Easements often adjust for growth in the size or scope of an easement as property responds to shifts in population and land use.
There are numerous classifications of easements, and they can be the most in-depth legal issue in a landlocked property sale. An easement may be public or private, based on who possesses the right to use it. In addition, there are easements by necessity, by prescription, by implication and custom easements. The length of these easements can also vary-some are just a tiny section of land, while others can encompass miles of terrain. Access easements, for instance, are designed to create a road to an isolated property, while utility easements grant utility companies the ability to access and install cables and pipes on your land, among other purposes. If the easement fails to meet the necessary requirements to pass legal muster, the court may allow a partition action to replace the easement with a prescriptive easement.
The ability to create a new easement can result from the contracts between property owners. In New York, an easement by grant is a written grant, but easements by necessity and by implication are created by courts to prevent landlocked land from losing its value. On the other hand, the law is clear that if a severed portion of a property would otherwise be landlocked, the owner does not have the right to use the property in such a way that it eliminates the easement.
A fence or even the growth of a tree to partially obstruct the easement may be a claim to negate the realization of the easement, in which case a judgment would be required to restore the easement whether or not an easement by prescription really exists.
Takeaways
Landlocked property has its own set of rules and regulations that create situations beyond the norm. The value of the landlocked property, the payment for access rights, and the responsibilities of the owners of each property in the agreement need to be determined before creating a contract signed by both parties.
Procedures for the Legal Sale of Landlocked Property
Before embarking on the process of legally selling a landlocked property, it is essential to properly survey the property. The survey will provide necessary details about the property’s borders and location. In order to obtain legal title to landlocked property, an easement must be obtained either through private purchase or government assistance. If the private route is chosen, the easement must be obtained from the neighboring property owner(s) whose property borders the landlocked property. This is only possible if the neighboring landowners are willing to grant legal access to the landlocked property. This can sometimes be negotiated for a fee. If the neighboring property owner does not want to grant legal access, government help may be required. If the government route is chosen, the landowner of the landlocked property must file a complaint in a government court. At this point, the court will rule whether or not a path to the landlocked property is needed. If it is determined that a path is necessary, the court will then determine whether the property owner asking for legal access to the landlocked property should be granted private purchase of the property or whether they must get the passage used by all parties wishing to use that particular path. The court will make this determination based on: The property owner will be required to use the easement until the landlocked property is sold. This is the best way to ensure that the status of the landlocked property is not held against the seller and will allow the seller to ensure that the landlocked property is kept in good condition for the buyer. Additionally, the seller must be clear that the sale of the landlocked property comes with the easement on it.
Challenges and Solutions in the Sale of Landlocked Property
Landlocked property presents unique challenges to sellers. Maybe you inherited the property, or perhaps you purchased it on a whim, or it was like the Bermuda Triangle of land sales – you couldn’t even see where you were buying it from. Whatever the motivation for buying, chances are the bubble of excitement wore off when you realized the hassles of having to get creative with selling your piece of property.
The problematic nature of selling landlocked property is easy to ascertain. Your property is essentially useless in its current form without going over or through someone else’s land. That’s not to say you can’t sell it, but your selling point will likely have much less to do with the land itself and much more to do with how whoever purchases it will be able to buy the landlocked property from you. Unless, of course, they’re willing to pay a king’s ransom and ½ of their kidney for it to deal with these issues in the future.
Still, while there certainly are hurdles to overcome, the sale of landlocked property isn’t impossible. The solution to selling landlocked land, however, is not a straightforward answer, and instead depends upon your circumstances.
In most cases, the solution is to negotiate an easement of the landlocked property. Done properly, a negotiated easement grants the buyer the legal right to traverse another’s property for a designated purpose, usually for the purposes of reaching the landlock property. For example , if the access road to your landlocked property is through your neighbor’s property, then you as the seller can grant an easement that allows the buyer access to the property via the neighbor’s property. It’s vital to have an attorney versed in easement law to draft this document, as failing to give the proper details and instructions in the easement can become a huge liability moving forward.
Of course, an easement is not the only option, nor is it guaranteed that an easement will even work. Every situation is different, and every piece of land has its own challenges and quirks. If you’re selling a piece of landlocked property, it’s probably best to enlist the services of real estate professionals to help provide you with the options best suited for you. In short, don’t decide on a whim that an easement is the best way to go simply because you’ve heard the term before—you would be well served to consult an attorney experienced in real estate, preferably one familiar with easements, to figure out the best course of action for you and your family, as not every situation is subject to easements. There are other solutions for selling landlocked property, such as transferring the property by way of quitclaim deed.
Whatever the scenario may be, be steadfast in your determination to sell the landlocked property. While the process can become onerous and lonely, you are not alone – there are real estate professionals eager to walk you through the various options available to your family or business.
Effects on Property Value and Buyer Market
The lack of direct access to a public roadway often leads to a depreciation of property value and a reduction in its attractiveness to potential buyers. However, how much value is lost and what pricing concessions should be given depend on a myriad of factors that are specific to each parcel of land.
Different factors leading to different results If a parcel of land is entirely surrounded by property owned by a single person or business entity, as opposed to a government agency, its value will be affected differently based on the current use of the surrounding lots and the plans for those surrounding lots going forward. If there is a single owner of land on all sides, and there are active plans for development such that the buyer may soon find themselves without proper access to their land, they will likely be forced to sell at a significant discount. The mitigation of this diminished value can be determined by the results of an appraiser’s formal analysis of the value of the property based on its current use, as well as the intended use of its adjoining lands. Similarly, if a parcel of land is surrounded by public roads rather than by land owned by a single entity, the value and price that would be appropriate to demand in sale will be diminished. If the parcel is not in a prime location and is located in a non-desireable region, its value will likely decrease further depending on whether there are active development plans for the region. If it is in a highly desireable location such as an upcoming district, the lack of proper access will hurt its value, but not as significantly. In such an instance, a buyer may be incentivized to purchase land-based on the potential for its appreciation in value over the foreseeable future. Compounding the problem is the fact that banks and lending agencies are generally unwilling to provide loans to purchase landlocked property. Lenders find issues when a potential parcel is subject to a right-of-way or easement which provides access over adjoining private property. Such restrictions worsen the property’s value and can significantly impair the potential for an adequate return on the investment. Obtaining financing for landlocked property is thus very uncommon and, in most instances, impossible. While the facts unique to each parcel of land subject render any determination of its valuation integral to a viable sale, the most important consideration in regard to selling landlocked property relates to its disclosure. In accordance with local and state disclosure laws, landlocked property is generally regarded as material information and must be disclosed to prospective buyers. The significance of this disclosure has been exhibited in a number of jurisdictions whereby sellers have had sales annulled over the disclosure of landlocked property issues. In a case where a seller intentionally hid the fact that a particular road provided the only means of access to a development property, the state’s Appellate Division held the seller liable for all damages resulting from the subsequent foreclosure on the property. In that case, the foreclosure was based on the foreclosure of the mortgage placed on the property because the lender was denied site plan approval; an approval that would have been granted if proper access had been established. In the recent riad enforcement decision in Suburban Consulting Engineers, Inc. v. Massachusetts Dept. of Transportation, the Superior Court of Massachusetts held that a right-of-access easement given to the state was valid even though the intention of the grantor was to reserve the right to use the property for access purposes. The court reasoned that the question of whether the rights conveyed were for the benefit of the entire subdivision’s residents required consideration beyond the language of the deed granting the easement. Therefore, while being landlocked can cause significant issues in regard to the value and the attractiveness of particular parcels of land, the specific facts of each case almost always yield specific solutions. If the right disclosures are made to each party involved, the availability of financing, and the quality of the value, can be properly assessed.
Case Studies and Precedents
Case Study 1: George’s Landlocked Parcel
George purchased a small parcel of land, a remnant lot after the developer of a neighboring property approved his plat application for redevelopment. At the time, George was aware that the only access to the property would be through his driveway, and the fact that he’d have to construct a 10-foot wide gravelly pathway for all other vehicles.
When his neighbor complained about the arrangement between the two parties, George quickly registered and recorded an easement for the gravel pathway he and his neighbor agreed would offer access to his landlocked property. When the easement was recorded in the county clerk’s office, it became legally enforceable against any future owner, asserting that maintenance is George’s responsibility.
Case Study 2: Adrian’s Agricultural Land
Adrian purchased a 400-acre agricultural lot. At the time of purchase, no driveways or public road access were provided on the property. Upon reading his title to the property, he realized that one of the title conditions was the establishment of a private road across the property for the benefit of the neighboring parcels as defined in the sales contract with the seller. The dedication of the private road to neighbor parcel owners to access to and from the main road was made on the following terms and conditions:
When Adrian turned the paperwork over to his real estate attorney , the attorney’s first response was to send out notices to all the neighbors, an event that would carry a cost to Adrian. In the notices, the attorney requested the neighbors to file any objections against the private road within a specific time-frame of two weeks. Following the expiration of that time-frame, Adrian could then file a claim to obtain court permission to record an easement to his property for the private road.
Case Study 3: Jason’s Utility Easement
Jason purchased a property in an upscale section, and a year later, received a letter from Northeast Utility Company requesting to execute a utility easement across the northern most point of his parcel. Jason responded to Northeast Utility Company, stating that there was already an existing easement on said property with the prior owners, and therefore, the electric company need not run a new legal easement as requested in its letter.
Jason sought out the services of a lawyer who verified his claim. It turns out the first easement for the Northeast Utility was filed in the County Register at the time of the initial sale to the previous owner. The first easement stated that the electric company had a right to construct and operate power lines across the property, while also requiring notification to the property owner prior to construction.